How to Work Out ROI with AI
A framework to calculate whether AI investment pays for itself.
What to measure
ROI for AI isn't just about cost. Value can come from: time saved, revenue uplift, risk reduced, quality improved. Start with what you can measure.
The formula
(Value delivered) − (Cost of AI) = Net benefit
If net benefit is positive, AI pays for itself. Aim for payback within 12–18 months.
Inputs
Cost: Licensing, implementation (often 20–40% of Year 1), ongoing support. Value: Hours saved × hourly rate, or revenue uplift. Be realistic.
Quick ROI calculator
Common mistakes
- Ignoring implementation cost (20–40% of Year 1)
- Overestimating savings—baseline first
- Not baselining—capture current state before you change it
- Treating it as one-off—AI costs recur
When ROI is unclear
Pilot first. Run a small-scale trial. Measure. Then scale if the data supports it. I help businesses baseline, model, and measure.